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its easy, when supply is increased, the price decreases. A decrease in price leads to an increase in demand. So technically supply creates its own demand.
Supply function is not what is available for supply, it is clearly defined as "what is the quantity of goods that suppliers are willing to supply at each price". So even if a supplier has ample stock it does not mean it is the supply of that product
. Technically supply is fixed by the producer or supplier who fixes it through their willingness. Thus supply is directly proportional to price. If price increases supply increases and vice versa. The logic behind this is if price goes up "having the cost of production at the same level" the profit margin increases. thus to earn more profit more quantity is supplied at high price and vice versa.
Thus generally speaking supply cannot create its own demand unless the good is a perishable one which the supplier cannot have more shelf life and it has to come to market causing the price to decrease effecting in high demand.
What else can I help you with?
Explain the say's law in economics?
states that supply creates its own demand.
What are the Keynes' critiques on classical economics?
One of the main critiques is on say's law, which is that supply creates its own demand. In a nutshell Keynes was able to explain the great depression by saying that demand creates supply. This is extremely simplified.
Supply creates a demand?
False(Kaylop)
Supply decrease and demand is constant?
If the supply decrease and demand is constant, it will result into higher prices for the good. Ideally, this will automatically make the demand higher than market supply which creates scarcity.
Can supply create its own demand?
Yes demand can create its own supply, the Keynesian economist view believed this. Markets will always try to meet demands because they want to gain the most they can from it therefore will create a supply to match demand.
Who said 'Supply creates its own demand'?
Someone who has a large quantity of something he needs to get rid of quickly.
Why supply curve is positively sloped?
Increasing population creates increasing demand for goods
Why supply curve positively slope?
Increasing population creates increasing demand for goods
Say coined by Jean-Baptiste Say what does Say's Law say?
Supply creates demand
What happens to the price of a good or service when there is excess demand?
When there is excess demand for a good or service, the price typically increases. This is because the high demand creates a scarcity of the product, leading sellers to raise prices to balance supply and demand.
What is the Importance of equilibrium price and quantity?
The importance of equilibrium price and quantity is that it creates a point where there is no pressure on the market to shift supply or demand. Suppliers supply exactly the quantity demanded.
What term describes the process by which a tumor creates its own blood supply?
the process through which the tumor supports its growth by creating its own blood supply is called angiogenesis
